IRS Tax Levy
The IRS has several collection tools at its disposal. The IRS can garnish your wages by way of a levy, forcing your employer to send a large percent of your paycheck to them. The IRS can even issue a levy to take money from your bank accounts or stocks from your broker! Ignoring your IRS tax problems can have serious repercussions.
American tax law allows the IRS to force other people (third parties) who have control of your assets to give those assets to the government. To get the tax money you owe, the IRS may send a notice of third party levy to your stock broker. Your stock broker must then forbid you from selling or trading your stocks for 21 days. At the end of the 21-day freeze, the broker must sell your stock and send the profits to the IRS.
The same can be done to your bank accounts. It is relatively easy for the IRS to locate all of your bank accounts using your Social Security number. Once they locate your accounts, the same 21-day freeze followed by payment of the funds to the IRS follows. This is true regardless of how long you’ve held the accounts or whether that money is earmarked for a vital personal expense. It is also true even if you are only a co-signer on an account, so beware of other accounts you may be on (kids, family members, etc.)
It is always in your best interest to avoid IRS tax levies. You cannot get back your money or negotiate for a lower amount once the levy has been satisfied, but until the 21 days are up, you can fight like a tiger.